Profile: Jeff Bresnahan
By Barbara Drury | smh.com.au | 10 August
Given the parlous state of global financial markets and the shrieks of dismay echoing around the country as people open their annual superannuation statements, SuperRatings managing director Jeff Bresnahan is surprisingly upbeat.
"In a perverse way, the negative returns are one of the best things that could happen. It makes people realise that super's not a magic pudding pumping out the 14 per cent returns we've been seeing for years," he says.
The average super fund was 6 per cent in the red last financial year but Bresnahan says that needs to be viewed in perspective. "Seen over five years, people are still up over 50 per cent on where they were."
He is in a unique position to take in the big picture, after "falling into super" back in 1979. He didn't realise it at the time, but his big break was getting a job straight out of school with Sun Alliance Life, where he observed massive changes in the super industry at first-hand.
"My father wanted me to be an actuary but I failed the HSC. I hated school - I loved footy too much and I just didn't study."
Bresnahan later redeemed himself by getting an MBA and starting his own super administration company. When he sold it in 2000, a non-competition clause kept him out of the industry for two years. "It was the best two years of my life," he says. "I had plenty of time to spend with my family and to look at opportunities in the industry."
At the time there was a lot of research being done on managed funds but none on super funds. "It was a $500 billion industry and it was not being researched at all. There was an opportunity for someone to come in and take the consumer's point of view.
"I knew some funds were out to help themselves and some were out to help consumers. My aim was to make funds accountable in the public domain. Six years down the track it's worked out but I was surprised how negative the industry response was early on. They said they didn't want to be measured. Once I had one fund committed to the process, more followed.
"The biggest issue when I [started SuperRatings] was that the average consumer had no idea how their super was being run. That meant funds had open access to charge whatever fees they wanted - there was half a trillion dollars just sitting there open to being ripped off.
"By creating league tables - and we were the first to do that - it wasn't hard to work out what were value funds. Now [super] gets front-page coverage because every Australian has an account," he says.
The industry has come a long way since the introduction of compulsory super 16 years ago but Bresnahan says the report card still reads "can do better".
"I'd still like to see totally transparent disclosure of fee components on super statements. They should be a line item, just as they are on bank statements. The biggest concern for us is that people don't realise how much they are paying to have their super managed."
He would also like to see the super guarantee raised from the present 9 per cent to 15 per cent, with 3 per cent coming from members and a 3 per cent co-contribution from the Government.
So where does the man with his finger on the pulse invest his own money? "I'm a member of quite a lot of funds. Sometimes funds refuse to give us information, so I have to join to get it. I have a mix of commercial and not-for-profit funds, and a self-managed super fund as well."
The big questions
Biggest break Getting a full-time job in the super industry straight out of school after failing my HSC miserably.
Biggest achievement My biggest satisfaction is having created the ratings industry in super. The improvement in accountability has been staggering and consumers are now receiving far better value from their super funds than when we first introduced ratings in 2002.
Best investment Believing in the abilities of two of my earliest clients, Colin Goldschmidt and Chris Wilks. I bought shares in their company, Sonic Healthcare, in the mid 1990s when the share price was 50c. The price is now about $13.50.
Biggest regret Selling down my Sonic Healthcare shares as the price rose.
Worst investment Too many to list, but probably buying a bucketload of shares in a company called Phoneware during the dotcom boom, based on a tip. They went into liquidation less than a year later.
Attitude to money I'm conservative when it comes to money, so gearing is not really my thing. But I do like shares and I diversify my portfolio across a range of professional managers. I finally worked out they were the experts, not me.
Personal philosophy You only get one shot at life, so make it a good one. If you have five true friends when you die, then you've had a successful life.
First published by Smh.com.au on August 10 2008
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